Bribes are Bad….J&J Continues Its Struggles to Learn Right from Wrong

Last year, I blogged about KV Pharmaceutical, Inc’s repeatedly bad decisions about selling products that had the wrong amount of active ingredient. The downward spiral of the company continued with a price gouging on a drug that was already sold by compounding pharmacists, but found an exponentially higher price when KV got it’s FDA approval. The FDA, for the first time in history, took away KV’s exclusivity that usually accompanies a new drug approval as a punishment.

It looks like the corporation with the most visible ethics issues in 2011 is Johnson & Johnson, which settled with the U.S. government regarding charges that it bribed medical professionals in several European countries to use its products as well as offered kickbacks to secure Iraqi government contracts under the U.N. Oil for Food Program. The health care giant paid a $21.4 million criminal fine without admitting or denying wrongdoing. It also paid the Securities and Exchange Commission $48.6 million, including disgorged profit.

Bribery in the UK is being heavily prosecuted, as is the Foreign Corrupt Practices Act in the U.S. Based on the history of companies with no ethical tone at the top, J&J will be in the headlines a few more times before all penalties are paid and settlements are finished.